Six Questions You Must Answer to Create Compelling Value Propositions

Customer value propositions are an essential part of a company’s business strategy and the foundation for all of its marketing and sales efforts. Unfortunately, many companies don’t devote enough time and energy to defining their customer value propositions, and as a result, their marketing and sales efforts aren’t as productive as they could be.

It’s difficult to overstate the importance of compelling value propositions. In Playing to Win:  How Strategy Really Works, A.G. Lafley and Roger L. Martin argue that a business strategy is essentially the answers to five interrelated questions, the two most important of which are:

  1. Where will you play?
  2. How will you win?
Lafley and Martin write, “These two choices, which are tightly bound up with one another, form the very heart of strategy and are the two most critical questions in strategy formulation.”
Customer value propositions are the answers to the “how to win” question. As Lafley and Martin put it, “To determine how to win, an organization must decide what will enable it to create unique value and sustainably deliver that value to customers in a way that is distinct from the firm’s competitors.”
What Makes Customer Value Propositions Weak?
Despite their undeniable importance, many companies don’t do a good job of identifying their customer value propositions or developing content resources and sales messaging that articulate those value propositions in a compelling way.

A few years ago, CEB conducted a survey of decision makers in B2B companies and found that only 57% of the “unique benefits” touted by sellers were seen by potential buyers as having enough impact to create a preference for a particular seller.

Over the past 25 years, I’ve reviewed hundreds of the value propositions used by clients, and what I’ve consistently found is that weak value propositions fall into three main categories:
  1. They are too generic. They don’t speak to how value is created for specific types of companies or buyers.
  2. They focus on product or service features rather than on the tangible results a customer obtains by using a product or service.
  3. The don’t include credible supporting evidence.
Not surprisingly, strong B2B value propositions exhibit the opposite characteristics. They describe specific elements of value for specific types of companies and buyers, they focus on business/economic results or outcomes, and they include credible evidence to support their value claims.
How to Develop Compelling Customer Value Propositions
Defining strong customer value propositions comes down to answering six fundamental questions about each major type or category of product or service that you offer:
  1. What are all of the significant reasons that people have for purchasing a product or service like mine? What problems or needs motivate the buying decision?
  2. What kinds of companies are likely to have the problems or needs that underlie these reasons to buy?
  3. Who within the prospect organization is affected by each problem or need? Who has the most to gain if the problem is solved and the most to lose if it isn’t?
  4. What specific outcomes are these people seeking?
  5. What features of my solution will produce these desired outcomes?
  6. What will the business/economic benefits be if these desired outcomes are achieved?
Using these six questions to define your customer value propositions will provide the essential foundation for developing effective marketing and sales content and messaging.
Image courtesy of GotCredit via Flickr CC.

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